first_img 41SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Applying for a mortgage is easier when you learn how to talk to lenders.by: Geoff WilliamsIn about a month or so, it won’t just be spring. It’ll be home selling and buying season, and you’ll start seeing the “For Sale” signs posted in yards as well as online advertisements beckoning prospective homebuyers.But before you allow yourself to be beckoned, it would behoove you to familiarize yourself with the following 10 terms – especially if this is your first time making one of the biggest purchases of your life.1. Fixed-rate mortgage. This means the interest rate you pay on your home loan won’t change. Over the years, your mortgage payment will likely change some – property taxes will likely rise, your homeowners insurance might climb or fall, or you might shed your PMI (a term we’ll come back to). But generally, if you have a fixed-rate mortgage, your monthly mortgage payment won’t change much over the years.2. Adjustable-rate mortgage. Also known as an ARM, this is essentially the opposite of a fixed-rate mortgage. You’ll have a fixed rate for several years, maybe five or 10, and then the interest rate adjusts according to the fully indexed interest rate, often the prime rate, which is what banks charge their most creditworthy customers. So while your interest rate and payments will likely be lower in the beginning than those of the homeowner with the fixed-rate mortgage, hope that interest rates remain low throughout the life of your loan. As interest rates climb, so too will your own interest rate and monthly payments. continue reading »last_img